USD/CAD remains bullish near term – Scotiabank

FX Strategist at Scotoabank Eric Theoret expects the pair to reach the 1.3200/50 area in the short term.

Key Quotes

“CAD drivers are steady, with a 2Y U.S.-Canada yield spread hovering around 22bpts as oil prices (WTI) show signs of stabilization around $43.50/bbl”.

“We look to further CAD weakness and note the ongoing shift in sentiment as options markets price a greater premium for protection against downside risk across a range of time horizons”.

“The recent USDCAD rally appears to have stalled over the past three sessions, with fresh marginal highs quickly retraced back to Tuesday’s close around 1.31. The technical picture remains broadly bullish across both trend and momentum indicators, and we continue to look for USDCAD gains toward 1.3200 and the July highs around 1.3250”.